Out of state smaller properties?

4 Replies

Hello everyone. How does one get started with out of state investing with smaller properties? Often you hear that you need 40-50 units to cover the cost of property management. What if you don't want that many units? 

How does someone get started with out of state investing with a simple triplex or fourplex?

Appreciate the feedback !

@Daniel Alva

Many people own 1-4 unit properties out of state, myself included. You have to budget correctly for expenses and property management.

This works better if the properties cash flow well.

you don't need that many... you just need to buy smart. MFH isn't always the best although it's extremely popular on here. Buy a property that makes sense... based on numbers.

@Daniel Alva

I have been investing out of state for years now and when I started out, it was small deals with great cash flow.  It is a myth when people say you need to buy large.  Do your due diligence and have a team set up in whatever state you ultimately choose.  Investing out of state is not black and white; there are variables that you have to make sure are accounted for since you will not be nearby.

Best of luck!

Hey Daniel,

You can still cash flow on small properties, even with financing. Just avoid D-class single family homes due to low property value. If you have a great property manager you could probably swing 4 units D-class and do just fine. 

For a new out-of-state investor buying an SFR I think the sweet spot is $1000 rents on a 75k property in good condition and a C neighborhood.

If you want to get started with 3/4 units you can either buy one that's occupied and doesn't need a ton of work with financing, which is pretty cool. Just find a good property manager and get to it! My property manager is awesome- as a result I get to live in CA and never see my properties, buy stuff at discount prices, and I've got someone that keeps my C class properties paid on time month in and month out! 

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